Tuesday, August 18, 2009

U.S., China to tap huge coal reserves

The United States and China will continue to tap their coal reserves simply because they are in abundance and are much cheaper than oil imports. This means more coal-fired than gas-fired power plants will come on stream in the next two years. The Economist Intelligence Unit (EIU) said in its report "The World in Figures: Industries," that demand for coal will rise by 4.6 percent this year to 6.8 billion tonnes as countries with abundant coal reserves will start to reduce their heavy dependence on imported oil. This means that less oil imports could mean more savings for the importing country's economic coffer. Inversely, this could also mean less income for the Organization of Oil Exporting Countries (OPEC).

James Hansen, a crusading American scientist, describes power stations that burn coal as "factories of death." Coal is the dirtiest fossil fuel that produces twice the carbon dioxide when it is burned thus greatly contributing to global warming.

However, the impacts of coal burning are totally ignored at this time when the world's developed countries like the United States and Germany, use at least 50 percent of their coal reserves to power their industries. While India and China use 70 and 80 percent, respectively. Besides, digging for coal provides employment to millions of people, the Economist magazine said in its article. Fully aware of the negative effects of coal-fired power plants on the environment, some environmentalists had thought of eliminating carbon emissions through the so-called carbon capture and storage (CCS), also known as carbon sequestration. This process allows the utilities firms to store carbon smokestacks underground for a long period of time.

However, policy-makers are in a quandary as to how it could be effectively implemented, knowing the tedious process that could be entailed before it can attain success. In fact, utilities firms could only agree in principle but are unable to fully put on streams the projects because, according to them, it is more expensive to build and run coal-fired power plants using the CCS. Already, some private sector entities are already commenting that the CCS is not workable at this time. And western governments like the U.S. have exerted so much efforts by setting aside in a stimulus bill the amount of US$3.4 billion in subsidies for the CCS project.

While other countries like the EU, Britain, Australia have signified their interest to fund demonstration plants as a means of helping the private sector fulfill its mandated tasks of converting coal into a clean energy that will not hurt the environment. But the private sector is saying the putting in place the CCS is just a waste of money and efforts on the part of the governments concerned. As to the deeper reasons why, the policy-makers will have to take a second look and find out if the CCS project is workable or not. Otherwise, it could be another futile attempt for the private utilities firms and the governments. In fact, FutureGen, in partnership with big resources firms, scrapped the same project last year after its projected cost jumped to $1.8 billion, says an Economist report.

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